There is no shortage of interest in and opinions regarding social investment and social impact bonds (SIBs). At RISE, a knowledge centre is currently being developed to assist and support the public sector with innovation and development. Already, unique approaches have been identified that are attracting interest from many quarters.
“It is important that independent stakeholders have access to both the knowledge and technical capacity,” says Tomas Bokström, project manager at the RISE.
Social investment and SIBs are predicated on identifying models that incentivise all involved stakeholders to invest in prevention and early intervention with a clear focus on impact; sometimes with the help of investors who are willing to share the financial risk. This approach of involving private and philanthropic capital originated in the United Kingdom where, in 2010, a prisoner rehabilitation programme was launched in which payments to investors were linked to a percentage fall in the level of recidivism compared to a control group. Since then, many variations on this idea have popped up around the globe aimed at tackling diverse issues such as homelessness, mental illness and social isolation.
“The fact that prevention pays has long been a topic of discussion, so the theme in itself is nothing new. However, the problem has been identifying models that demonstrate the potential sufficiently clearly. As we now begin to see various models in practice, the chances of going from word to deed increase. Having said that, sufficient thoroughness and stringency are prerequisites and these in turn require competence. If, for example, expected outcomes are poorly defined or the incentive model is unclear, there is a risk that funds will be poorly invested or that lessons will not be learned,” says Tomas Bokström.
Positive development for children
In Sweden, Norrköping Municipality has led the way in social impact bonds. Since 2016, the municipality has been running an initiative financed by Leksell Social Ventures and supported by the Swedish Association of Local Authorities and Regions’ (SALAR) Mission Mental Health project and Lumell Associates. The project is intended to improve the situation facing children placed in local authority care and treatment homes or with the Swedish National Board of Institutional Care. By creating a team to chart, coordinate and plan these placements – as well as what happens afterwards – it is hoped to increase the chances that the child/youth will enjoy positive development. This is combined with extra support in school as it is well-known that results obtained there, for example eligibility for upper-secondary education, are important factors for future success.
“As this project is ongoing, it is too early to report any results; however, what we can say already is that those placed in care feel that they are receiving good support from the initiative. In carefully following up these cases, valuable knowledge is also generated for both the municipality and those of us supporting the project.”
When the project is completed, this will form a knowledge-base that can be applied to RISE´s ongoing work.
Reduced sick leave goals
The Norrköping example differs from the majority of overseas projects in that, to a large extent, it is the municipality itself that is implementing the initiative. In one forthcoming project involving RISE, the public sector is also financing the initiative; with the municipalities of Botkyrka and Örnsköldsvik investing, within the framework of an SIB, in the work environment and health of their own employees in order to reduce sick leave. RISE, in collaboration with SALAR, will be providing the two municipalities with implementation support. The investment of SEK 44 million over three years relates to all of the municipalities’ employees.
“Many people are awaiting the outcome of this example with interest. Both in Sweden and internationally we are seeing a development towards more prevention and early interventions, as well as a greater focus on impact and remuneration models. This is entirely in line with social investment and social impact bonds. There is also a weariness with the constant stream of projects with ambiguous results and flawed implementation. One way to address this is to place demands on preparation, implementation and following up results. This is something that the RISE can offer support with; together with the public-sector partners, we can identify incentivisation models that benefit all stakeholders,” says Tomas Bokström.
The project to reduce recidivism among prisoners released from HM Prison Peterborough in Cambridgeshire, United Kingdom was a success. The goal for remuneration was a reduction of 7.5%; after four years, a reduction of 8.4% had been achieved.